Loans have become a crucial part of today’s world. They have become important because they give us the necessary means to live. Loans do so by providing the money we need to achieve the said luxury. This luxury could be buying a new car or simply renovating your dream house. This leads to the creation of different types of loans. Personal loans, Car loans, Home loans, etc. In this article, we discuss personal loans. Personal loans are unsecured loans. This means you don’t need to provide any collateral to the lender for receiving money. Here is a detailed process for how to apply for a personal loan.
Different banks and NBFCs in India offer personal loans to individuals. However, their interest rates vary, depending on some factors. These factors are credit history, repayment tenure, monthly income, etc. So, when you are applying for a personal loan, see which financial institution offers you a loan at a good interest rate. But before you apply for one, know what a personal loan is.
What are Personal Loans?
Personal loans are loans that get issued when the borrower requests an amount of money for a wide range of personal expenses. The customer decides whether they want to put in the money in repaying their pending debts or put it in organising their kid’s education or even marriage. banks, credit unions, or online lenders can offer individuals personal loans. Every medium has a different set of rules and regulations.
Though banks often rely on collaterals as a sense of security, they provide both Secured & Unsecured forms. The repayment process of the loan amount is done in EMI’s, this occurs for a decided time. That could be anywhere between 12 months to 60 months. Personal loans are quicker in the sense of both application and acceptance. The process of application is fast as it requires minimal documentation. They can be approved within 24 hours if the bank is already familiar with the borrower.
Eligibility Criteria for Applying for Personal Loans
Before we dive into the process of how to apply for a personal loan, let’s first check the grounds on which you are eligible enough to apply for the loan.
- Anybody can apply for a loan, as long as they age between 21 to 60 years.
- The consumer should have at least 2/3 years of job experience.
- You must be salaried or self-employed.
- They should be at least earning above 25,000 monthly.
- They should have a credit score or CIBIL score of above 700.
Documents requirement.
The documentation requirement differs for self-employed and salaried customers while applying for a personal loan.
Documents for the Salaried borrower
- Identity proof of the consumer (PAN card, Aadhar card, Driving licence).
- Address proof of the consumer (Voters ID, Utility bills such as Electricity bill Gas bill or Water bill, Passport).
- Bank statements of the last 6 months.
- Salary slip of the last 3 months.
- Income tax returns
Documents for Self Employed borrower
- Identity proof of the consumer (PAN card, Aadhar card, Driving licence).
- Address proof of the consumer (Voters ID, Utility bills such as Electricity bill Gas bill or Water bill, Passport).
- Bank statements of the last 6 months.
- Income tax returns for the last 2 years.
- IT assessment or Clearance Certificate.
- Business proof of the consumer (Licence, registration certificate, GST number).
- Income Tax Challan for TDS Certificate (Form 16A).
The process of how to apply for a personal loan
The borrower can apply for personal loans by two means, offline and online. We have explained both the processes.
Offline mode
- Visit the branch of your chosen lender.
- Fill up the form that your lender provides you.
- Submit the requested documents, including your KYC documents and loan application form.
- The lender then proceeds to check the documents and eligibility of the borrower.
- The borrower gets the loan when the lender finds it fit.
Online mode
- Choose a website from which you want to obtain a personal loan.
- Search for the option “Loans”
- Search for “Personal loans” under it.
- After finding it, fill up the needed details.
- Click on “Submit”.
- Provide the KYC documents when the lender asks.
- The lender will then check all the documents.
- If the lender is satisfied, then you can get the loan amount that you requested.
Request through ATM Machines
You may now apply for a personal loan using ATM kiosks. When you submit a request, someone from the bank will contact you.
Personal loans provide a wide range of benefits to customers. The personal loan application process is easy and hassle-free. It also has a lower interest rate compared to other types of loans. Furthermore, you can avail of personal loans without any collateral or security. Hopefully, with this article, you now understand the process of applying for personal loans a little better.
